Beneficiary Assignment Medicare D

Beneficiary-Centered Assignment For Medicare Part D Tammie Chau, University of California - San Diego By matching beneficiaries’ current medication regimen with the right prescription drug plan, the states’ Department of Health Services can improve beneficiaries’ access to necessary drugs while lowering the cost to the beneficiary, states, and the federal government. Beneficiary-Centered Assignment, a method of matching individuals’ drug needs to a formulary plan, is a cost effective strategy to better serve Medicare-Medicaid dual eligibles. Over 6.2 million low-income seniors and disabled citizens qualify for both Medicare and Medicaid coverage. These dual eligibles are randomly assigned to prescription drug plans (PDPs). These privately-administered PDPs can vary depending on covered drug benefits, premiums, co-payments, and the low-income federal subsidy. As consumers, enrollees have the option of changing their drug coverage using Medicare’s Web-based Plan Finder. However, the majority of dual eligibles do not explore available online options and remain enrolled in randomly assigned PDPs. Using Maine as an example, states should assist in enrolling Key Facts and reassigning dual eligibles to • “Dual eligibles” are those who qualify for both low-cost drug plans that fit beneMedicare and Medicaid. They disproportionficiaries’ needs. The process beately have multiple chronic conditions requirgins by reviewing the last three ing an average of ten (10) or more prescriptions months of an individual’s drug per month. regimen and comparing the po• An estimated total of $47 billion and $53 billion tential out-of-pocket expenses. will be spent in 2009 and 2010, respectively, States should collaborate with on Part D drug benefits. their pharmacist associations • Random assignment of common pharmaceuincluding pharmacy students to ticals can cost a monthly difference of $242 use Medicare’s Plan Finder. In more than the least expensive drug plan. Maine, if an enrollee’s plan does not cover 85 percent of the medications they currently take, then the state can switch drug plans on behalf of the beneficiary. Each participant is then notified by letter about the switch and can opt- out if they prefer not to have their plan changed. On January 1, 2006, dual eligibles transitioned from Medicaid’s comprehensive drug coverage to automatic enrollment in Medicare Part D’s PDP. This random assignment ensured that each drug plan had equal amounts of enrollees instead of tailoring a plan to beneficiaries. Random assignment of eligible enrollees not only complicated beneficiaries’ access to prescription drugs, but also resulted in higher costs for the federal government and states.

Random assignment of PDPs to dual eligibles makes it more difficult for enrollees to obtain necessary drugs. For example, if a drug is not included on the approved list, then the beneficiary must pay out-of-pocket or forego the drug entirely. Allowing states to better accommodate dual eligibles with Beneficiary-Centered Assignment provides coverage for current medication regimens without causing discrepancy in access to prescription drugs. The potential savings for states and the federal government is substantial in maintaining this coverage. Widespread use of Beneficiary-Centered Assignment could streamline enrollees into just several of the available PDPs. In turn, this could influence private plans to compete for enrollment based on adding common drugs to formularies. Talking Points • Current assignment of dual eligibles is random and based upon equalizing the number of enrollees in each private drug plan. • Beneficiary-Centered Assignment or intelligent assignment assigns dual eligibles to a prescription drug plan that meets the individual’s needs. • Maine is the only state with authority granted from the Centers for Medicare and Medicaid Services (CMS) to reassign dual eligibles to plans that cover 60 percent to 95 percent of their drugs by evaluating beneficiaries’ drug regimens and plan options.

Next Steps There is an ongoing challenge to better serve dual eligibles with their special health needs. Decreasing the widespread confusion for dual eligibles, Medicare Part D should find an alternative method of enrolling beneficiaries into a prescription drug plan. State legislators can enact Beneficiary-Centered Assignment by taking steps to obtain authority granted from CMS to give state pharmacist associations authorization to automatically enroll dual eligibles into cost saving plans that match the beneficiaries’ current drug regimen.

Sources Laura Sumner et al, “Improving the Medicare Part D Program for the Most Vulnerable Beneficiaries.” Commonwealth Fund, May 2007. Jack Hoadley et al, “The Role of Beneficiary-Centered Assignment for Medicare Part D” MedPAC, June 2007. “The Medicare Prescription Drug Benefit- An Updated Fact Sheet.” Henry J. Kaiser Family Foundation, March 2009. Vernon Smith et al, “The Transition of Dual Eligibles to Medicare Part D Prescription Drug Coverage: State Actions during Implementation” Henry J. Kaiser Family Foundation, February 2006.

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